Credit crunch looking more ominous than previously thought

Here's a statement from WaMu regarding the NY state Attorney General's suit against eAppraiseIT:

We have absolutely no incentive to have appraisers inflate home values. In fact, inflated appraisals are contrary to our interests. We use third-party appraisal companies to make sure that appraisals are objective and accurate.

Here's a brief -- albeit totally incomplete -- synopsis of the credit crisis:

The inability of many of those borrowers to cover loan payments once they reset led to the credit crisis. More than 50 lenders have gone out of business this year, tens of thousands of people have lost their jobs in the industry, foreclosures have soared nationwide and it has become more difficult for home buyers to get home loans.

What is failed to be mentioned in almost every story about this crisis is the securitization market. Basically, mortgages were sold, repackaged as interest-bearing securities, and sold to hedge funds and other investors. You'll see the carnage in the coming weeks and months. It seems that the US Treasury is doing all it can to prop up the industry to counter the natural forces that would roil the markets.

NakedShorts: The Einhorn Agenda I
Get the pdf here
More on the credit crisis
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